After customers discovered evidence of the data-tracking, British Telecom admitted spying without users’ notice or permission, but said it did so only during a “small-scale trial” of new software that tracks Internet activity to send people relevant advertising.

Angry customer Stephen Mainwaring said that after noticing “strange things” on his computer he contacted BT, which said it was a virus. He ran virus scans, and even bought a new PC.

In a televised interview on UK Channel 4, Sanderson admitted data monitoring was done without notice to users. Asked if BT is going to offer Mainwaring an apology or compensate him, she did not specifically answer either question, but said that “we have tried to make contact with Mr. Mainwaring” and that she “doesn’t really think, generally, that we will need to offer customers compensation.” She said that BT will be conducting another trial of the software, made by another copany called Phorm, this month and will ask for volunteers to participate. A clip of the interview is available on the site.

BT will begin public trials this month of the software, which “has been criticized by privacy campaigners, including the Foundation for Information Policy Research (FIPR) think tank, which said it believes Phorm's technology breaks the Regulation of Investigatory Powers Act.” Phorm has dismissed the claims, saying their technology is designed to protect privacy, not the opposite. BT is looking for 10,000 customers to volunteer for the trial.

Methods used in targeted advertising bothered New York assemblyman Richard L. Brodsky so much, that he has drafted a bill that would make it a crime for certain Web companies to use customers’ personal information for advertising without their consent. “If it passed, computer users could request that companies like Google, Yahoo, AOL and Microsoft, which routinely keep track of searches and surfing conducted on their own properties, not follow them around,” reports the New York Times.

The Federal Trade Commission (FTC) sponsored a town hall meeting on targeted advertising in Washington D.C. in November, 2007, following complaints from a number of privacy groups. The Center for Digital Democracy and the U.S. Public Interest Research Group had filed a complaint with the FTC against Microsoft and other Web-based advertising companies for "unfair and deceptive" practices to collect information about their customers.

Michael Agger discussed the voyeuristic qualities of Google Street View, a program that offers 360-degree street shots of many U.S. addresses, which was launched in June, 2007. “Kalin-Casey expressed her privacy concerns to the site BoingBoing, and she was joined by a gaggle of commenters who felt that Google had crossed a line by photographing people's homes, cars, and garbage cans. The race was on to find the most alarming and actionable image,” he writes.

The number of computers tracked by Internet service providers is growing in the United States. "The practice represents a significant expansion in the ability to track a household's Web use because it taps into Internet connections, and critics liken it to a phone company listening in on conversations. But the companies involved say customers' privacy is protected because no personally identifying details are released," reports The Washington Post.

Douglas Schweitzer writes for Computerworld he doubts whether proposed targeted advertising laws are enough to protect privacy. “I agree with Brodsky that it would be nice if consumers could opt out of advertising generated via personal data gathered during their online browsing and worse yet, during their online shopping. But on the other hand, how many users would go the extra step and actually grant specific permission to companies to link their searches and surfing data to their name, address and other personal data?” he writes on The Security Sector blog.

The San Jose Mercury News reports that it’s not just cyber criminals, hackers and the U.S. government that are getting access to personal information, it’s legitimate Web sites, too. “Privacy advocates find this virtual voyeurism disturbing, if not downright threatening. By having such complete and personal data on individuals, marketers can target them when they are most vulnerable, pushing everything from subprime loans to new drugs to particular political candidates,” according to the story.

The FTC says it “pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies,” according to its Web site.

FindingDulcinea has a Web guide on Internet privacy that includes information about how Web sites such as social networking sites and search engines use personal information to deliver targeted advertising.

The U.S. Conference of State Legislatures Web site lists state laws that protect consumers from spyware, nuisance advertising software, and other internet privacy breaches. Spyware is software that secretly invades computers to track online activities or personal information of Web users, change settings on user’s computers, or cause pop-up advertising messages. The site also includes a national survey of internet privacy enforcement cases.

BT is the major telecommunications and broadband Internet provider in the United Kingdom, and provides service in more than 70 countries. Now privatised and doing business as BT Group, it was formerly the UK state telecommunications operator. The company’s Privacy Policy states, “We may share your personal information with other companies so that they can contact you with details of other products or services you may be interested in. We will only do this if you have agreed to this and where the companies agree to use your personal information for that purpose only.”